If you've been squirreling cash in your bank, the latest numbers from the FDIC quarterly report might be troubling.
The list of the FDIC's "problem banks" numbered 775 in the first quarter of this year, a spike over last year, when 702 banks made the list for all of 2009. So far this year, regulators have shuttered 72 banks, more than twice as many as this time last year.
So what does this mean for those tucking savings in the bank, especially as they get closer to retirement and want ready access to cash?
As I've said before in this blog, the quickest path to wealth since the recession appears to have been in the stock market, despite the volatility. Real estate is still in the doldrums, and rates on CDs and money market accounts are stuck in limbo.
But if you've been relegating more of your money to cash, either because you discovered your risk tolerance wasn't what you thought after the stock market free fall, or you need a stable source of funds, the FDIC numbers might concern you. One place to look for reassurance is Bankrate's Safe and Sound ratings, which will give you an indication of your bank's safety.
But even if your bank does fail, your accounts are not at risk. The FDIC insures individual accounts up to $250,000. If the FDIC can't locate a buyer for the bank and has to become the receiver, the agency usually closes the bank on a Friday and takes the weekend to balance the books. Consumers often don't notice much disruption in service.
And finally, the FDIC report also pointed to some good news in the form of strong financials. Banks reported first-quarter profits of $18 billion, more than three times the first quarter of last year, and big banks saw the largest year-over-year increase in earnings.